Walgreen’s record move a mystery; talk centers on London meetings

By Russ Britt

Shares of Walgreen Co. jumped nearly 6% to an all-time high Tuesday, but the cause for the stock move is somewhat of a mystery as there was no news on the drug retailing giant that hit the wires.

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Instead, analysts on Wall Street say they are hearing that Walgreen
/quotes/zigman/245520/delayed/quotes/nls/wagWAG management spoke in bullish tones at an investor conference in London, which was also attended by its international partner, Alliance Boots. Stateside sources at the two brokerages hosting the conference, Deutsche Bank and Morgan Stanley, confirm the meetings were going on this week but had no information on the substance of the discussions.

Walgreen shares climbed steadily throughout the day and finished trading at $64.20, up $3.55. Shares peaked at an intraday high of $64.71, a gain of nearly 7%, toward the end of the session.

It appears there were no specific announcements coming out of the London meeting that would have boosted shares, analysts say, and it’s unclear exactly what management might have said to trigger the buy signal. Emails and calls to Deutsche Bank and Morgan Stanley were not immediately returned. Walgreen officials had no comment.

Analyst Ross Muken of ISI Group said he had no sense of what was said at the London meeting. He speculated, though, whatever came out of discussions, coupled with a strong earnings report from rival CVS Caremark Corp.
/quotes/zigman/169740/delayed/quotes/nls/cvsCVS, might have contributed to Walgreen’s strong gain. He said it was “probably a mix of both.”

CVS managed to beat earnings and revenue estimates, plus offer a first-quarter outlook that was ahead of analyst forecasts, despite its announcement last week it would eliminate tobacco sales from its drug stores Oct. 1, thus losing $2 billion in annual revenue.

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